Last week’s Bureau of Labor Statistics jobs report for March provided markets with some much-needed good news. Analysts at Bank of America noted that while the news is positive, the economy still has much work to do to return to healthy growth.
After weeks of war, the U.S. reportedly added 178,000 jobs in March, a big jump from the 133,000 added in February, which led the unemployment rate to tick down slightly to 4.3% from 4.4%.
“March jobs showed solid momentum and better labor flows, with payrolls rebounding,” Bank of America analysts said.
Health care continued to be a bright spot in hiring, leading job gains along with construction, transportation and warehousing. Nearly 40% of the new jobs added (76,000) came from the health care sector.
Public-sector employment continued its steep decline under President Donald Trump’s administration, shedding another 18,000 jobs in March. The federal government has cut 355,000 jobs, or nearly 12% of its workforce, since October 2024.
The number of long-term unemployed (jobless for 27 weeks or more) was little changed at 1.8 million in March, but that number is up by 322,000 over the year. About 6 million Americans not in the labor force want a job, and another 4 million are working part-time for economic reasons.
Labor markets are improving despite downside risks, Bank of America says
Analysts at Bank of America were very impressed with the March numbers, but the firm acknowledged that the economy still needs tuning.
“The March jobs report was strong across the board, with NFP (non-farm payrolls) rebounding sharply after a weak Feb. Even allowing for some strike- and weather-related payback, the three-and six-month averages showed solid underlying momentum,” Bank of America analysts said in a note emailed to TheStreet.
The good news didn’t end there. Revisions have been a big part of the labor story. At the beginning of the year, the BLS revised its 2025 jobs data lower by 403,000, or more than 30,000 jobs per month. But this time around, the BLS data showed something different.
“Revisions were minimal, and the highlight was the u- rate falling nearly two-tenths to 4.3%. Despite lower participation, flows data was constructive. More workers have recently been moving into employment, and fewer have been flowing into unemployment, alongside benign layoffs and claims.”
But it wasn’t all good news. While fewer people were being fired and leaving their jobs, employers were not opening their doors to hire new recruits.
“Also, although dated, the Feb JOLTS data showed subdued hiring and low job openings. Together, this data should be enough for the Fed to remain comfortably on hold and watch inflation risks tied to the Iran war, but not strong enough to start discussing rate hikes,” BofA said.
“Bottom line, these signals point to a labor market that is steady but not hot, still operating in a low-hire, low-fire regime.”
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Consumers are less confident about finding a new job, NY Fed says
U.S. workers have a mixed view of the labor market, according to the latest survey from the Federal Reserve Bank of New York. While they feel secure in their current jobs, they also don’t trust the labor market to support them if they’re let go.
The number of people expecting to lose their jobs in the next 12 months fell 1% to 13.8%, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations from last month. However, consumers’ perceived probability of finding a new job within three months, should they be fired, also fell by 1.6% to 44%, just above the series low recorded in December.
Related: American confidence in U.S. labor market takes unexpected turn
With that scary possibility in their minds, it makes sense that the number of people expected to quit in the next 12 months also dropped by 2.8% to 15.9%, a new survey low.
The NY Fed’s Survey of Consumer Expectations is an internet-based survey of a rotating panel of about 1,200 household heads. Respondents participate in the panel for up to 12 months, giving the researchers a long-term view of their feelings about the economy.
The respondents were more optimistic about other aspects of the economy, especially regarding debt payments.
The average perceived probability of missing a minimum debt payment over the next three months fell by 2.1% to 11.6%, the lowest level seen in two years.
February BLS jobs report shows the U.S. cut 97,000 jobs
The job growth in March was a welcome departure from the struggles the U.S. job market faced in February.
U.S. employers cut 97,000 non-farm payroll jobs in February, a month when analysts were expecting the economy to add 55,000 jobs. The unemployment rate ticked up to 4.4% from 4.3% the previous month.’
The job losses were wide-ranging, and even health care, which has been a bright spot in the employment economy, saw a downturn in the month.
“There really is not much good news coming out of the employment report,” Scott Helfstein, head of investment strategy at Global X, said in an email to TheStreet.
“There were declines in almost every category. Transportation, manufacturing, construction, information, and business services were all down. Health care had been propping up the numbers, but a large strike sent those numbers lower as well.”
Related: Rising gas prices force Americans to make unexpected changes
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